Berkeley Group reports sales boost

Berkeley Group released an upbeat statement on Monday, powered by strong revenues and well-timed land-bank building, as it updated the market at its annual general meeting. The housebuilder has added three sites to its land bank over the period: a 10-acre redevelopment site in White City, a 450-apartment site in Battersea and a development in West Sussex for 69 new homes.

The company said trading in the four months to 31 August met its own expectations, and forward sales have improved and now total around £1.5 billion. In particular UK sales over the May to August period have been boosted by the government's Help to Buy scheme, which offers help with house-purchase deposits, and has also been cited by other housebuilders such as Bovis Homes and Persimmon as a huge boon to recent business.

The company is building a great reputation as a firm that can create places where people want to live. A good example is its alchemy at Kidbrooke Village, in Greenwich, where 2,000 council flats were bulldozed to make way for 4,000 new homes, doubling the density on the same amount of land and yet five-bedroom homes are fetching £1 million.

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Last year the FTSE 250-listed company put in place a four-pronged strategic review - to use its scale to add value to the land bank, to manage risk effectively, to provide earnings visibility and to invest in land opportunities and construction over the next two years to create long-term shareholder value.

That could be seen as window-dressing to help push through a generous remuneration deal for the management. Monday's announcement that the company is on track to deliver its first milestone payment of £568 million by 30 September 2015 - and to this end will pay 59p on 27 September 2013 and a further 360p by 30 September 2015 - should also soften up investors.

Shareholder advisory firm PIRC has opposed the remuneration deal, saying returning money to shareholders, either by dividend payments or share repurchase, is a fiduciary duty that should not carry an additional remuneration award.

Mark Hughes, managing director and co-head of research at Panmure Gordon, said: "Trading is said to be in line with expectations and of particular note is the growth in sales to UK consumers, which is positive for the industry and economy as a whole. The company is ungeared following the disposal of a 534-unit rental portfolio in June."

Panmure's 12-month target price has been hiked to 2,150p from 2,046p.